Broadcom’s $69 Billion VMWare takeover set to close Wednesday
Broadcom announced today it plans to finalize the $69 billion acquisition of cloud computing firm VMware tomorrow, Wednesday, marking the conclusion of one of the largest takeover deals in the technology industry. This acquisition has been under close scrutiny from regulators worldwide.
The chipmaker has secured all necessary regulatory approvals for the purchase, with China granting approval on Tuesday, subject to additional restrictive conditions, Reuters reported, citing a statement from the company.
This news comes a little over a year after Broadcom’s acquisition of cloud services provider VMware for $61 billion in a cash-and-stock deal. The acquisition was positioned to transform Broadcom into a diversified tech firm.
As part of the deal, VMware shareholders will receive $142.50 per share, and Broadcom will also take on $8 billion of VMware’s net debt. This acquisition is the second-largest globally in 2022, following Microsoft’s $68.7 billion acquisition of video game maker Activision Blizzard in January.
The Chinese regulator clarified that VMware’s server software should remain compatible with local hardware, and the deal should not impede customers from purchasing and using Broadcom’s hardware products, such as storage adapters.
Concerns among investors arose last month amid reports suggesting that escalating tensions between the U.S. and China could jeopardize the deal. However, with the successful regulatory approvals, the acquisition is proceeding as planned.
Broadcom, with a history spanning over six decades, is a prominent supplier of semiconductor devices for wired, wireless, enterprise storage, and industrial markets. The company produces a range of chips used in various products, from mobile phones to telecom networks. The acquisition of VMware positions Broadcom to gain access to data centers where VMware’s technology is a staple for cloud customers.